NZLII Home | Databases | WorldLII | Search | Feedback

Motor Vehicles Disputes Tribunal of New Zealand
You are here:  NZLII >> Databases >> Motor Vehicles Disputes Tribunal of New Zealand >> 2019 >> [2019] NZMVDT 229

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Eade v Spot One Ltd - Reference No. MVD 305/2019 [2019] NZMVDT 229 (30 October 2019)

Last Updated: 5 December 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 305/2019
[2019] NZMVDT 229

BETWEEN JASON NEVILLE EADE

Purchaser

AND SPOT ONE LTD
Trader





MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Haynes, Assessor

HEARING at Auckland on 17 October 2019



APPEARANCES
J N Eade, Purchaser (by audio-visual link)
J Tweedie, for the Trader

DATE OF DECISION 30 October 2019

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

  1. Jason Eade’s application to reject the vehicle is dismissed.
  2. Spot One Ltd shall, within 10 working days of the date of this decision:

_________________________________________________________________

REASONS

Introduction

[1] On 11 July 2018, Jason Eade purchased a 2008 BMW 335i for $12,500 from Spot One Ltd. Mr Eade now seeks to reject the vehicle, claiming that it has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA) and that Spot One made misleading representations as to the vehicle’s condition and specifications in breach of the Fair Trading Act 1986 (the FTA).
[2] Spot One says that Mr Eade should not be entitled to reject the vehicle. It says that it has already rectified some of the vehicle’s faults and remains willing to remedy any other fault that breaches any of the guarantees in the CGA. It also denies misleading Mr Eade about the vehicle’s condition or specifications.

The Issues

[3] Against this background, the issues requiring consideration are:

Issue 1: Does the vehicle have faults that breach the acceptable quality guarantee?

[4] Section 6 of the CGA imposes on suppliers and manufacturers of consumer goods "a guarantee that the goods are of acceptable quality." Section 2 of the CGA defines "goods" as including vehicles.
[5] The expression "acceptable quality" is defined in s 7(1) as follows:

7 Meaning of acceptable quality

(1) For the purposes of section 6, goods are of acceptable quality if they are as—

(a) fit for all the purposes for which goods of the type in question are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from minor defects; and

(d) safe; and

(e) durable,—

as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard as acceptable, having regard to—

(f) the nature of the goods:

(g) the price (where relevant):

(h) any statements made about the goods on any packaging or label on the goods:

(ha) the nature of the supplier and the context in which the supplier supplies the goods:

(i) any representation made about the goods by the supplier or the manufacturer:

(j) all other relevant circumstances of the supply of the goods.

[6] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in s 7(1)(a)-(e) of the CGA as modified by the factors set out in s 7(1)(f)-(j), from the perspective of a “reasonable consumer”. The test is an objective one; it is not a view of those factors from Mr Eade’s subjective perspective.
[7] Mr Eade alleges that the vehicle has, or has had, the following faults, which mean that it is not of acceptable quality, in breach of s 6 of the CGA:

The paintwork scratches

[8] Mr Eade says that he specifically asked Spot One whether the vehicle was scratched before purchasing the vehicle. He says he was told by Justina Tweedie, a director of Spot One, that the vehicle had some pencil touches on its bumpers but was not told of any other cosmetic blemishes. Mr Eade also notes that the Trade Me listing for the vehicle says that the vehicle “looks awesome” and that it is “very tidy”.
[9] Mr Eade submits that, taking account of these pre-purchase representations as to the condition of the vehicle, the vehicle’s appearance is not acceptable. Mr Eade produced photographs to show several clear scratches and scuff marks to the paintwork on the front and rear bumpers and the lower left sill. Northern Collision Centre in Christchurch has provided an estimate of $577.88 to perform the required repairs.
[10] Spot One says that it should have no liability for the scratches in the paintwork. It says that it told Mr Eade that the paintwork was scratched and Mr Eade inspected the vehicle before he purchased it.
[11] In light of the pre-purchase representations as to the condition of the vehicle, I am satisfied that vehicle’s appearance and finish was unacceptable for the purposes of s 6 of the CGA. The vehicle’s bumpers and lower left sill have damaged areas that have been poorly repaired. I accept that Spot One advised Mr Eade that the vehicle had “pencil touches”, but I consider that statement would have given a reasonable person the impression that the vehicle had some minor scratches that were remedied using a touch up pencil. The damage present is much more extensive than that, and the efforts made to remedy the damage were substandard.

The chipped windscreen

[12] The vehicle has a small stone chip in the centre of its windscreen, approximately 5mm in diameter, which Mr Eade says he noticed shortly after he took possession of the vehicle. Mr Eade says that stone chip has compromised the windscreen, which is essential to the vehicle’s structural integrity. Mr Eade also says the vehicle failed its most recent warrant of fitness inspection because the stone chip is within the driver’s “critical vision area”.
[13] Spot One says that the vehicle recently passed compliance certification shortly before it was sold to Mr Eade, which it would have failed if a significant windscreen chip had been present.
[14] I am satisfied that the vehicle had a pre-existing stone chip in the centre of its windscreen. Although Spot One initially submitted that the stone chip was not present at the time of sale, it also provided auction documents from Japan that show that the vehicle had a stone chip on its windscreen before it was imported into New Zealand. For unknown reasons, that stone chip was not identified when the vehicle was inspected for compliance purposes, but I am satisfied that the evidence presented by Mr Eade and Spot One shows that the windscreen was chipped when Mr Eade purchased the vehicle.
[15] I am also satisfied that the windscreen chip breaches the acceptable quality guarantee in s 6 of the CGA. Although I am not satisfied that the chip has compromised the vehicle’s structural integrity as alleged by Mr Eade, I am satisfied that the stone chip is within the driver’s critical vision area, meaning that the vehicle should not have obtained a warrant of fitness before it was sold to Mr Eade because of the stone chip.

The faulty battery

[16] Mr Eade says that the vehicle’s battery had a pre-existing fault, which caused a warning message to illuminate shortly after purchase. Spot One replaced the battery, but Mr Eade alleges that the replacement battery is too small, and that the vehicle continues to experience problems caused by the replacement battery.
[17] Spot One says that the replacement battery is suitable, and has provided evidence from Acme Batteries Ltd, trading as Koba Batteries NZ, which supplied the battery, to show that the battery it installed in the vehicle was appropriate.
[18] As applicant, Mr Eade is obliged to prove each aspect of his claim on the balance of probabilities. In respect of the alleged defective battery, the evidence presented by Mr Eade does not prove that the battery is defective. For example, Mr Eade says that he was told by a BMW franchise that the vehicle’s battery was too small for the vehicle, but I heard no evidence from that BMW franchise, or any other suitably qualified person, as to the unsuitability of the replacement battery.
[19] Accordingly, although the vehicle may well have an underlying issue that is causing the symptoms that Mr Eade complains of, Mr Eade has not provided sufficient evidence to enable me to draw any conclusion as to the existence of any fault with the vehicle’s battery.
[20] However, I am satisfied that the installation of the replacement battery was not performed properly, in that the replacement battery was not registered to the vehicle. Mr Haynes, the Tribunal’s Assessor, advises that the vehicle’s engine control module should have been programmed to recognise the replacement battery. Mr Haynes says that this process is called “registration” and ensures that the battery is then charged properly. Spot One should now perform that registration.

The worn tyres

[21] Mr Eade alleges that the vehicle’s tyres were in unacceptable condition at the time of sale. He says that although the vehicle passed compliance testing shortly before sale, the tread on those tyres was so low that he was required to replace all of the vehicle’s tyres shortly after purchase, at a cost of $735.93.
[22] Spot One says that the vehicle passed compliance testing before it was sold to Mr Eade, meaning the tyres were in acceptable condition at the time the vehicle was sold.
[23] Although I accept that the vehicle passed compliance testing shortly before it was sold to Mr Eade, and that the compliance documents record that all of the tyres had a tread depth above the minimum level required to obtain a warrant of fitness of 1.5 mm, I am satisfied that the left front and left rear tyre have not been as durable as a reasonable consumer would consider acceptable, in breach of s 6 of the CGA.
[24] The left front tyre had a tread depth of 1.7 mm and the left rear tyre had a tread depth of 1.8 mm at the time of sale. Although a reasonable consumer should understand that tyres are consumable items and will require replacement from time to time, a reasonable consumer purchasing a vehicle of this price, age and mileage described in the glowing terms used by Spot One, would not expect the vehicle to be supplied with tyres so close to the minimum tread depth, which would clearly require replacement shortly after purchase.
[25] I am not, however, satisfied that Mr Eade has proven that the condition of the right front and right rear tyres was unacceptable. Those tyres had a minimum tread depth of 2 mm, and in the absence of any other evidence to show that they were otherwise in unacceptable condition, those tyres would not have required immediate replacement and would have been as durable as a reasonable consumer would consider acceptable.

The malfunctioning navigation unit

[26] The Trade Me listing for the vehicle stated that the vehicle had “IDrive with Navigation (requires NZ maps)”. This was an important point for Mr Eade as he says that the navigation system, and its adaptability to New Zealand maps, was influential in his decision to purchase the vehicle. Mr Eade says that the navigation unit in the vehicle cannot be easily adapted to New Zealand maps and that additional hardware needs to be installed, at a cost exceeding $700 to make the navigation unit functional in New Zealand.
[27] Spot One disputes this and says that no hardware upgrade is required. It says that Mr Eade simply needs to perform a software upgrade to make the navigation unit functional in New Zealand, as stated in the Trade Me listing.
[28] Mr Eade relied heavily on advice he was given by an Auckland based business called Eurosurgeon Performance in submitting that the vehicle’s navigation unit could not be adapted to New Zealand maps without a hardware upgrade. Mr Eade advised that Eurosurgeon Performance was reluctant to give evidence on his behalf at the hearing, so I did not have the benefit of hearing from Eurosurgeon Performance as to why it considered that a hardware upgrade, rather than a software upgrade, was required.
[29] In the absence of any evidence from Eurosurgeon Performance, or any other suitably qualified professional as to the adaptability of this vehicle’s navigation unit to New Zealand maps, I am not satisfied that Mr Eade has proven that the navigation unit cannot be adapted to New Zealand maps as represented by Spot One. Accordingly, I am not satisfied that the vehicle’s navigation unit is of unacceptable quality for the purposes of s 6 of the CGA.

The CD player

[30] The vehicle was supplied with a six-disc CD player, which does not work. I accept Mr Eade’s evidence as to the existence of this fault, which is supported by diagnostic scans performed on the vehicle, which show a fault code relating to the vehicle’s CD player.
[31] Given the pre-purchase representations made by Spot One as to the condition of the vehicle, I am satisfied that a reasonable consumer would have expected the vehicle’s CD player to function. Accordingly, I am satisfied that this fault breaches the acceptable quality guarantee in s 6 of the CGA.

The leaking water pump and power steering unit

[32] The vehicle’s water pump required replacement in August 2018. Spot One accepts that the vehicle had a leaking water pump and paid for that component to be replaced at its expense. The vehicle then developed a leak from its power steering unit in October 2018. Again, Spot One accepted liability for this defect, and repaired the leaking power steering unit at its expense.
[33] I am satisfied that the leaking water pump and power steering unit both breach the acceptable quality guarantee. A reasonable consumer would not expect the vehicle of this price, age and mileage to develop a leak from its water pump and power steering unit so shortly after purchase. I am also satisfied that, although Spot One repaired the faults, the vehicle now smells of power steering fluid. Spot One has indicated that it is prepared to rectify that smell.

Various fault codes

[34] Mr Eade also complained that the vehicle has numerous other undiagnosed faults, as evidenced by fault codes found when diagnostic scans have been performed on the vehicle. Mr Eade submits that these diagnostic scans suggest that the vehicle may have faults with its:
[35] Mr Haynes, the Tribunal’s Assessor, advises that it is not uncommon for a BMW 335i of this age and mileage to generate fault codes and that the existence of fault codes is not necessarily proof of the existence of an actual fault. Mr Haynes also advises that many of the fault codes could be caused by the vehicle’s battery not being registered to the vehicle.
[36] On that basis, and in the absence of any other evidence from Mr Eade to prove that the vehicle has any defect with any of the components to which these fault codes relate, I am not satisfied that Mr Eade has proven that these fault codes are evidence of any defect with the vehicle that would breach the acceptable quality guarantee in s 6 of the CGA.

Issue 2: Has Mr Eade lost the right to reject the vehicle?

[37] Mr Eade seeks to reject the vehicle on the basis of its accumulated defects. He is not able to, as he has lost the right to reject the vehicle because he took too long to do so and because he has damaged the vehicle.
[38] The law relating to the loss of the right to reject goods is set out in s 20 of the CGA, which states:

20 Loss of right to reject goods

(1) The right to reject goods conferred by this Act shall not apply if—

(a) the right is not exercised within a reasonable time within the meaning of subsection (2); or

(b) the goods have been disposed of by the consumer, or have been lost or destroyed while in the possession of a person other than the supplier or an agent of the supplier; or

(c) the goods were damaged after delivery to the consumer for reasons not related to their state or condition at the time of supply; or

(d) the goods have been attached to or incorporated in any real or personal property and they cannot be detached or isolated without damaging them.

(2) In subsection (1)(a), the term reasonable time means a period from the time of supply of the goods in which it would be reasonable to expect the defect to become apparent having regard to—

(a) the type of goods:

(b) the use to which a consumer is likely to put them:

(c) the length of time for which it is reasonable for them to be used:

(d) the amount of use to which it is reasonable for them to be put before the defect becomes apparent.

(3) This section applies notwithstanding section 170 of the Contract and Commercial Law Act 2017.

Mr Eade took too long to reject the vehicle

[39] Under s 20(1)(a) of the CGA, Mr Eade will lose the right to reject the vehicle if he has not exercised that right within a reasonable time. For the purposes of s 20(1)(a) of the CGA, a "reasonable time" is a period from the time of supply of the goods in which it would be reasonable for the defect to become apparent, having regard to the factors set out in s 20(2)(a)–(d) of the CGA.
[40] In Nesbit v Porter, the Court of Appeal shed some light on the statutory words in s 20(2) of the CGA.[1] The Court observed that: [2]
... A reasonable time under s 20 must accordingly be one which suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of a breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually and preferably the supplier, for inspection.
[41] In this case, Mr Eade first became aware of the scratched paintwork, windscreen chip, faulty battery, worn tyres, and faulty CD player within weeks of purchasing the vehicle. He then became aware of the leaking water pump in late August 2018 and the leaking power steering unit in October 2018. Mr Eade did not then unequivocally reject the vehicle until he filed his Tribunal application in late August 2019, more than 13 months after he purchased the vehicle.
[42] Mr Eade claims that he rejected the vehicle earlier, and points to various pieces of correspondence with Spot One, in which he says that he rejected the vehicle.
[43] I am not satisfied that the correspondence relied upon by Mr Eade contains any unequivocal rejection of the vehicle. Instead, although Mr Eade says in the correspondence that he is rejecting the vehicle, he then proceeds to require Spot One to rectify the faults. In my mind, this correspondence shows that Mr Eade was equivocal as to the outcome he sought, and that he was prepared to allow Spot One an opportunity to rectify the vehicle’s faults.
[44] Under s 22 of the Act, a consumer must notify the supplier of their decision to reject the vehicle and of the grounds for that rejection. I consider that this imposes an obligation upon a consumer exercising their right to reject the vehicle to clearly communicate that rejection to the supplier. Mr Eade’s correspondence with Spot One contains mixed messages as to his preferred remedy, with mentions of his rejection of the vehicle followed by requests to rectify the vehicle’s faults. In my mind the requests to rectify are inconsistent with rejection of the vehicle. In support of this conclusion, I note that Mr Eade’s email of 10 January 2019, which was the most recent correspondence between the parties before this application was filed, states that Mr Eade will ask the Tribunal for orders requiring Spot One to repair all of the faults.
[45] The law imposes an obligation on Mr Eade to exercise his right to reject the vehicle with reasonable haste once he becomes acquainted with the nature of the vehicle’s defects. Mr Eade knew of the nature of most of the vehicle’s defects in July or August 2018. He did not unequivocally reject the vehicle 12 months later. Applying Nesbit v Porter, by waiting so long to reject the vehicle, Mr Eade took too long, and has now lost that right.

The vehicle has been damaged

[46] Further, even if Mr Eade has exercised his right to reject the vehicle within a reasonable time, he has lost the right to reject the vehicle because he has damaged it.
[47] Under s 20(1)(c) of the CGA, Mr Eade will lose the right to reject the vehicle if it was damaged after delivery to him for reasons unrelated to its state or condition at the time of supply. In this case, the vehicle was damaged in an accident in February 2019, with the required repairs costing $12,406.95. On the basis that there is no evidence to show that the accident or subsequent damage was caused by the state or condition of the vehicle at the time of supply, in my view, that is damage sufficient for Mr Eade to lose the right to reject the vehicle.
[48] The subsequent repair of that damage does not re-establish his right to reject the vehicle. I consider that s 20(1)(c) of the CGA is clear that the right to reject the vehicle is lost when the damage occurs, and there is no suggestion in the CGA that the right to reject can then be resurrected if the damage is repaired. Accordingly, applying s 20(1)(c) of the CGA, Mr Eade has lost the right to reject the vehicle.

Issue 3: What remedy is Mr Eade entitled to under the CGA?

[49] The remedies relevant to this claim are set out in s 18 of the CGA, which provides:
  1. Options against suppliers where goods do not comply with guarantees

(1) Where a consumer has a right of redress against the supplier in accordance with this Part in respect of the failure of any goods to comply with a guarantee, the consumer may exercise the following remedies.

(2) Where the failure can be remedied, the consumer may—

(a) require the supplier to remedy the failure within a reasonable time in accordance with section 19:

(b) where a supplier who has been required to remedy a failure refuses or neglects to do so, or does not succeed in doing so within a reasonable time,—

(i) have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied; or

(ii) subject to section 20, reject the goods in accordance with section 22.

(3) Where the failure cannot be remedied or is of a substantial character within the meaning of section 21, the consumer may—

(a) subject to section 20, reject the goods in accordance with section 22; or

(b) obtain from the supplier damages in compensation for any reduction in value of the goods below the price paid or payable by the consumer for the goods.

(4) In addition to the remedies set out in subsection (2) and subsection (3), the consumer may obtain from the supplier damages for any loss or damage to the consumer resulting from the failure (other than loss or damage through reduction in value of the goods) which was reasonably foreseeable as liable to result from the failure.

[50] Under s 18(2)(a) of the CGA, Mr Eade is entitled to have the defects that breach the acceptable quality guarantee, which have not already been rectified, remedied within a reasonable time. Further, under s 18(2)(b)(i) of the CGA, Mr Eade is entitled to recover the cost of replacing the two unacceptably worn tyres. Mr Eade asked Spot One to replace the tyres and it declined to do so. Mr Eade is therefore entitled to recover all reasonable costs incurred in having those tires replaced.
[51] Accordingly, the Tribunal orders that Spot One shall, within 10 working days of the date of this decision:

Issue 4: Has Spot One engaged in conduct that breaches s 9 of the FTA?

[52] Mr Eade also submitted that Spot One engaged in misleading conduct by overstating the condition of the vehicle, when it had scratched paintwork, a chipped windscreen and “end of life” tyres. Mr Eade also alleges that Spot One made misleading representations about the functionality of the navigation unit.
[53] Section 9 of the FTA provides:
  1. Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[54] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:[3]

... The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

Representations regarding the vehicle’s condition

[55] I am satisfied that Mr Eade has proven that Spot One made representations, both in the Trade Me listing for the vehicle and in its correspondence with Mr Eade, as to the condition of the vehicle. Those representations included that the vehicle “looks awesome” and that it was “very tidy”.
[56] Those were representations as to the condition and quality of the vehicle, which would lead a reasonable consumer to believe that the vehicle was of a high standard and free of observable defects, or at least that the seller considered the vehicle to be in excellent condition having performed enquiries necessary to form that view.
[57] Those representations were misleading. As discussed above in my assessment of whether the vehicle has been of acceptable quality for the purposes of the CGA, the vehicle had pre-existing defects with its paintwork and windscreen that meant that it was not of the standard or quality represented by Spot One. I am therefore satisfied that Spot One engaged in misleading conduct in breach of s 9 by representing that the vehicle “looks awesome” and that it was “very tidy”.

Representations regarding the condition of the vehicle’s tyres

[58] I am also satisfied that Spot One engaged in misleading conduct in respect of the condition of the vehicle’s tyres. In response to Mr Eade’s pre-purchase inquiries as to the condition of the tyres, Spot One described the brand of tyre, and sent a side-on photograph of one of the tyres but made no mention that the tyre tread of two of the tyres was fractionally above the minimum level allowed under warrant of fitness guidelines and that the tyres would soon require replacement.
[59] By leading Mr Eade to believe that the vehicle’s tyres were in good condition, I am satisfied that Spot One has engaged in conduct in breach of s 9 of the FTA.

Representations as to the navigation unit

[60] For the reasons set out in paragraphs [26] to [29] above, I am not satisfied that Mr Eade has proven that Spot One engaged in misleading conduct in respect of the adaptability of the navigation unit because Mr Eade has not proven that the navigation unit cannot be adapted to New Zealand maps as represented by Spot One

Issue 5: What remedy is available to Mr Eade under the FTA?

[61] The remedies available for a breach of the FTA are set out in s 43 of the FTA which is as follows:

43 Other orders

(1) This section applies if, in proceedings under this Part or on the application of any person, a court or a Disputes Tribunal finds that a person (person A) has suffered, or is likely to suffer, loss or damage by conduct of another person (person B) that does or may constitute any of the following:

(a) a contravention of a provision of (a relevant provision):

(b) aiding, abetting, counselling, or procuring a contravention of a relevant provision:

(c) inducing by threats, promises, or otherwise a contravention of a relevant provision:

(d) being in any way directly or indirectly knowingly concerned in, or party to, a contravention of a relevant provision:

(e) conspiring with any other person in the contravention of a relevant provision.

(2) The court or the Disputes Tribunal may make 1 or more of the orders described in subsection (3)—

(a) whether or not the court grants an injunction, or the court or the Disputes Tribunal makes any other order, under this Part; and

(b) whether or not person A made the application or is a party to the proceedings.

(3) The orders are as follows:

(a) an order declaring all or part of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) to be void; and

(ii) if the court or the Disputes Tribunal thinks fit, to have been void at all times on and after a date specified in the order, which may be before the date on which the order is made:

(b) if an order described in paragraph (a) is made in respect of a contract that is associated with a collateral credit agreement, an order vesting in person B all or any of the rights and obligations of person A under the collateral credit agreement:

(c) an order in respect of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) varying the contract or the arrangement in the manner specified in the order; and

(ii) if the court or the Disputes Tribunal thinks fit, declaring the varied contract or arrangement to have had effect on and after a date specified in the order, which may be before the date on which the order is made:

(d) if an order described in paragraph (c) is made in respect of a contract that is associated with a collateral credit agreement, and if that order results in person A no longer having property in the goods that are the subject of the contract, an order vesting in person B the rights and obligations of person A under the collateral credit agreement:

(e) an order directing person B to refund money or return property to person A:

(f) an order directing person B to pay to person A the amount of the loss or damage:

(g) an order directing person B, at person B’s own expense, to repair, or to provide parts for, goods that have been supplied by person B to person A:

(h) an order directing person B, at person B’s own expense, to supply specified goods or services to person A.

(4) In subsection (3) (a) to (d), collateral credit agreement, in relation to a contract for the supply of goods, means a contract or an agreement that—

(a) is arranged or procured by the supplier of the goods; and

(b) is for the provision of credit by a person other than the supplier to enable person A to pay, or defer payment, for the goods.

(5) An order made under subsection (3) (a) to (d) does not prevent proceedings being instituted or commenced under this Part.

(6) This section does not limit or affect—

(a) subpart 5 of Part 2 of the Contract and Commercial Law Act 2017; or

(b) section 317 of the Accident Compensation Act 2001.

[62] The remedies in s 43(3) of the FTA are discretionary, and the discretion is to be exercised so as to give effect to the policy of the FTA, which includes to protect the interests of consumers. The object of the remedies in s 43(3) of the FTA is to do justice to the parties in the particular circumstances of the case.[4]
[63] In the circumstances of this case, Mr Eade’s preferred remedy of a refund of the purchase price is disproportionate to the nature of the loss or damage that he has suffered as a result of Spot One’s misleading conduct. That is particularly so when Mr Eade has owned and used this vehicle for more than 15 months and has damaged it significantly in that time. Instead, I consider that the appropriate remedy is to require Spot One to perform repairs to the damaged paintwork, to rectify the chipped windscreen and to compensate Mr Eade for the cost of purchasing two replacement tyres. However, because I have already made those orders under the CGA, no further orders under the FTA are required.

DATED at AUCKLAND this 30th day of October 2019

B.R. Carter
Adjudicator


[1] Nesbit v Porter [2000] NZCA 288; [2000] 2 NZLR 465 (CA).

[2] At [39].

[3] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

[4] Red Eagle Corp Ltd v Ellis, above n 3, at [31].

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZMVDT/2019/229.html